sa sme fund review: 2020 · 2020. 10. 27. · keet van zyl (co managing partner) andrea bohmert (co...
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SA SME Fund Review: 2020SA SME Fund Review: 2020
RO L E S & R E S P O N S I B I L I T I E S
Overall governance, performance monitoring
and strategic direction, including defining the
investment mandate of the company
RO L E S & R E S P O N S I B I L I T I E S
Approval of investments in line with the in-
vestment mandate of the company
RO L E S & R E S P O N S I B I L I T I E S
Deal identification, due diligence and implemen-
tation of approved investments. Management of
portfolio funds and performance monitoring
PAPE Fund 3
Masisizane
OneBio
SA SME
Fund Team
Board
SA SME Fund Shareholders
Investment
Committee
Summer Place
Equity Fund
KNF Ventures
The University
Technology Fund
Spartan
SME Fund
Savant
Venture Fund
Digital Africa
Ventures
A2Pay
4Di Capital
+ 2 funds
Create and scale hundreds of new businesses
Commercialise and showcase SA intellectual property (IP)
Leverage additional capital for SMEs and startups
Catalyse Venture Capital (VC) asset class
Create and incubate new fund managers
SA SME Fund’s Mission
Build narrative of business as a national asset
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Foreward by Adrian Gore, SA SME Fund ChairmanI am pleased to present this review of the Fund’s work to date. To recap, the mandate of the Fund is
to use our collective resources as large businesses to stimulate the economy by helping mainly black
entrepreneurs and small businesses scale and increase the attractiveness of investing in this sector.
Our goal over the next 5 years is to invest in and help scale 200 sustainable black SMEs, 5 world-class
black entrepreneurs and 10 significant black-owned businesses. To this end, the Fund’s capital will
be fully deployed by the end of the 2020 financial year, divided between venture and growth (equity
and debt) capital.
We launched the CEO Circle in March 2019, with the aim of leveraging our corporate shareholder
base to scale 10 black-founded and -led high growth companies into businesses of significant scale.
Personalised pathways have been developed for the 7 selected companies to help them scale.
The CEO Circle 2020 will get underway early next year.
I greatly appreciate the time and support you have given to the Fund’s initiatives to date, and remain
excited by what we as business can collectively achieve.
SA SME Fund: Achievements to dateInvestment OverviewThe Fund has made significant progress in its investment strategy and deployment of funds.
The Fund has committed R925m to date in growth and venture capital investments:
Industry building initiativesTransforming and broadening the VC and Fund Manager landscapes:
PAPE Fund 3
R100m
SummerPlace Equity Fund
R125m
Spartan SME Fund
R100m
KNF Ventures
R30m
Savant Venture Fund
R110m
4Di Capital
R125m
Establishment of Black-managed VC fund with incubation and financial sup-
port from an experienced investment house; and a supply chain solution deal.
R400m R525mGrowth Venture Capital
Partnered with Knife Capital to run Grindstone Johannesburg, de-
signed to accelerate and develop black VC entrepreneurs
Partnered on a flagship transformation initiative to increase the number
of black and female fund managers in Private Equity and VC spaces
R225mPipeline
A2Pay
R25m
Masisizane
R50m
One Bio
R75m
University Technology Fund
R150m
Digital Africa Ventures
R35m
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Fund Overview4Di Capital (4Di) is a specialist in deploying funding to high-growth, high-impact
technology start-up companies in the early stage, with a focus on investing in scal-
able South African start-ups.
4Di Capital Fund 3 is a generalist venture capital fund investing into seed and
early stage start-up technology companies with high growth potential in verti-
cals such as FinTech, InsureTech, EdTech and AgTech.
The Fund’s First Close was in early 2019, with the SA SME Fund as the anchor.
4Di Capital Fund 3: R125m
Investment Overview4Di has made 1 investment to date.
Life Q: LifeQ is a biometric data and heath-tech company with offices in
Stellenbosch and Atlanta, USA that has developed technology that sup-
ports the world’s leading wearables and biometric companies.
Anton van Vlaanderen (Partner)
Justin Stanford (Partner)
Anton is an entrepreneur, angel investor and venture
capitalist. He also plays an advisory role for ESET
Southern Africa, a 4Di Group company.
Justin is an entrepreneur, angel investor and venture capitalist from
Cape Town, South Africa. With more than 15 years’ experience, he
is founder, board member, advisor, or investor to a wide variety of
companies in the technology industry.
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Fund OverviewA2Pay provides technology solutions to the informal retail market in South Af-
rica. Through its collaboration with the Jobs Fund, A2Pay provides a solution to
the unbanked spaza shop merchants to assist them to monitor the financial per-
formance of their shops.
The SA SME Fund IC has approved a R25m facility to A2Pay which will allow
A2Pay to foster financial inclusion via the provision of loans to existing spaza
shop owners for growth and expansion.
A2Pay: R25m
Investment OverviewA2Pay provides debt financing to entrepreneurs in the township
economy. The loans will enable spaza shop owners to:
• Increase turnover as a result of being able to increase stock holdings;
• Open additional spaza shops; and
• Build back rooms as an additional annuity income stream.
Tina Mason (Director)
Tina has a proven track record in various corporate
enterprises, including the successful implementation
of the Jobs Fund programme.
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Fund OverviewDigital Africa Ventures (“DAV”) is the first black female venture capital fund in
South Africa and it is linked to AfricArena and the AfricArise Accelerator, provid-
ing pipeline to the fund and support to investee companies.
DAV is a generalist venture capital fund investing into seed and early stage start-up
technology companies with high growth potential.
The SA SME Fund has committed R25m at First Close with an additional R10m on
meeting the fundraising milestone.
PAPE Fund Managers will be supporting DAV with compliance oversight, office
space, and mentoring at no cost to DAV.
Digital Africa Ventures Fund 1: R35m
Investment OverviewAs the fund is not yet established; no investments have been
made to date, however investments will initially emerge
from AfricArena and AfricArise.
Nonkululeko Komanyane (Principal)
Thandeka Xaba (Principal)
Nonkululelo started her career at a private equity firm and worked
her way up to co-founding a technology accelerator with a focus on
connecting startups to the South African ecosystem.
Thandeka is a CA(SA) with a background in corporate finance. Her
passion for entrepreneurship led her to found GlamAlly, a beauty
tech start-up, and Tariro Foundation, a youth development NPO.
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Fund OverviewKNF Ventures (Pty) Ltd (“KNF”) is a South African Section 12J Venture Capital
Company (“VCC”) managed by Knife Capital. KNF has the sole objective of in-
vesting in qualifying VC companies. Knife Capital as the Investment Manager is
tasked to Find, Make, Grow and Realise investments for KNF with a focus on in-
novation driven ventures with proven traction.
KNF closed in February 2019 with commitments of R178m.
KNF Ventures: R30m
Investment OverviewKNF has concluded 7 investments to date:
Quicket – Cloud-based ticketing platform for any size event.
DataProphet – AI/ Machine learning for the manufacturing industry.
SkillUp – E-Learning platform connecting tutors and learners.
PharmaScout – IoT temperature monitoring solutions for the
pharmaceutical industry.
PURA – Carbonated beverage brand with low sugar and natu-
ral flavour innovation.
Granite WMS – SaaS warehouse management solutions for SMEs.
Snapplify – EdTech marketplace and eBook publishing business.
Keet van Zyl (Co Managing Partner)
Andrea Bohmert (Co Managing Partner)
Keet is a venture capitalist, on the SAVCA Board,
and worked at HBD Venture Capital, Investec
and Procter & Gamble.
Andrea was previously at Hasso Plattner
Ventures Africa, Siemens and Dimension Data.
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Fund OverviewThe Masisizane Fund is an Old Mutual initiative which provides funding and busi-
ness development support to SMEs. The SA SME Fund has partnered with Masisi-
zane to establish the Fuel Franchise Fund which will invest capital (debt and equity)
into experienced franchisees seeking to operate fuel retail stations.
Masisizane has an extensive track record in funding fuel retailers across SA and so
will provide support related to franchisor, franchisee and site selection, as well as
post-investment oversight.
The SA SME Fund has committed R50m and Masisizane has committed R20m,
bringing the Fund to first close at R70m in the last quarter of 2019.
Masisizane: R50m
Investment OverviewMasisizane Fund has a strong portfolio of loans to SMEs, having approved
over R600m in loans to SMEs and assisted more than 400 enterprises.
The Masisizane Franchise Fund will make its first investments in Q1
2020. One is a new fuel retail store, which will consist of a major fuel
retailer forecourt, truck stop and branded food outlets, resulting in
105 permanent new jobs.
Zizipho Nyanga (CEO)
Portia Zilwa (Investments Head)
Zizipho has over 14 years’ experience in development finance,
financial management and external audit. She has worked in
various organisations such as the IDC, EY and Kagiso Media.
Portia’s career in the Financial Services sector, includes
First National Bank and Anglo-American Zimele, where
her passion for entrepreneurship blossomed.
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Fund OverviewOneBio Seed Investment Fund (“The Fund”) is a venture capital fund dedicated to
investing in biotech companies. The Fund borrows from the highly successful Silicon
Valley model of combining science, business and investment and will provide early
stage seed capital to biotech start-ups from across South Africa. The Fund will be
the only biotech seed investor in Africa, and will capitalise on the global growth in
biotech investment opportunities driven by the falling costs of basic biology tools.
The Fund will focus on biotech startups that are late in the research cycle and ear-
ly in the product cycle. Particular areas of interest include healthcare, agricultural,
food, bio-fabrication and biological tools sectors.
The Fund will close in the first quarter of 2020.
Current commitments into the Fund: the SA SME Fund (R75m) and the Technology
Innovation Agency (TIA) (R8.5m).
OneBio: R75m
Investment OverviewOneBio is a new Fund, achieving its First Close in October 2019.
The Fund has identified a strong pipeline of potential investments,
including a biotech company that harnesses the floral diversity of the
Cape Floral Kingdom to identify and harvest novel and useful biologi-
cal enzymes, used in laboratory applications.
Michael Fichardt (CEO)
Nick Walker (CSO)
Michael is an entrepreneur, technologist and investor,
with experience working in banking, private equity,
business consulting, and technology startups.
Nicholas is a scientist, entrepreneur and venture builder.
During his career he has worked in business develop-
ment and venture building.
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Fund OverviewPAPE Fund 3 (“The Fund”) is a generalist private equity fund investing in unlisted,
mid-cap SME investments operating predominantly in South Africa.
PAPE Fund Managers (“PAPE”) is an established, black-owned boutique private equi-
ty manager with offices in Bryanston and Stellenbosch.
The Fund closed in July 2019 at R951m with support from PIC, EPPF, FMO, Rosebank
Wealth Group, 27 Four, Transport Sector Retirement Fund and Alexander Forbes.
PAPE Fund 3: R100m
Investment OverviewPAPE Fund 3 is a generalist private equity fund investing in unlisted,
mid-cap SME investments. It is managed by PAPE Fund Managers, an
established, black-owned boutique private equity firm.
Laser Group: a third party logistics company operating across all
industry sectors.
Singular Systems develops bespoke software in the financial
technology sector.
Angelo Kater provides bespoke conversions of panel vans into ambu-
lances, buses, mobile clinics and mobile offices.
Zuko Kubukeli (CEO)
Guy Baxter (Director)
Zuko has worked in private equity since 2002,
leading more than 40 investments with 24 exits
returning in excess of 34% IRR.
Guy has been involved in private equity in South
Africa since 2006 as well as establishing a suc-
cessful manufacturing for export business.
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Fund OverviewSavant Fund 1 is a hardware and engineering focused early stage VC fund, focused on
investing in and partnering with highly skilled science and technology inventors for
their start-up growth journey.
Savant Fund 1 achieved First Close at the end of 2018 with the SA SME Fund as its
anchor investor.
Savant Fund 1: R110m
Investment OverviewSavant has made 2 investments to date.
SmartBlade: SmartBlade is a medical-tech start up that offers a cost
effective, novel and practical solution to the management of difficult
airways in human patients. The device allows single operators of var-
ied skill levels to intubate difficult airways.
Jonga: Jonga is a security-tech startup, focused on providing home
security and monitoring to low income communities that leverages
community policing.
Nick Allen (Principal)
Kate Turner-Smith (Investment Manager)
Nick is an engineer with an MBA. He has spent 17 years work-
ing with startup companies, and has a passion for building
businesses from first principles.
Kate is an experienced and passionate investment profes-
sional with a strong scientific background. She leads Savant’s
life sciences portfolio and heads up the operations function.
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Fund OverviewSpartan is black-owned and led Non-Bank Financial Institution (NBFI) with a
proven track record of providing specialised financing to SMEs. Its strategic
aim is to back entrepreneurs so they can grow.
Spartan SME Fund: R100m
Investment OverviewSpartan provides a range of debt facilities to
SMEs to facilitate growth, including working cap-
ital finance, asset based finance and medium term
loans. Among other impacts, Spartan has enabled
entrepreneurs to:
• Grow by providing funding specifically for
contracts that the entrepreneur would oth-
erwise not have been able to fulfil; and
• Retain jobs by providing working capital fi-
nance to bridge the payment gap due to late
payments by SOEs.
89% of Spartan’s loans have been to black
entrepreneurs, with 63% being African black.
Kumaran Padayachee (CEO)
Alun Frost (Chairperson)
Kumaran has been funding established SMEs for
the past 23 years so has a deep understanding of,
and expertise in SME financing.
Alun has 30 years experience with owner-
managed businesses through debt, PE, VC
and BEE transactions.
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Fund OverviewSummerPlace Equity Fund I is a South Africa focused growth equity fund that
invests in established, cash-generative medium-sized South African-domi-
ciled enterprises operating across various sectors.
The Fund seeks to make equity (and equity-like) investments of between
R15m and R50m in exchange for equity positions of between 26% and 50%
and seeks to deploy more growth than replacement capital in any one invest-
ment. All Fund investments come with a board seat as a prerequisite, to influ-
ence strategy development and support management.
SummerPlace Fund I: R125m
Investment OverviewThe Fund’s first transaction – Cool (kids’) Cabs, was approved on 25
March 2019, with pay-away on 14 June.
Founded in 2009 by owner, Tiffini Hein, the business offers a personalised
scholar transportation service anchored on safe transportation in the
form of appropriate child restraints at all times, coupled with other safety
features such as on-board cameras, hands-free communication in transit,
anti-hijack driver training, female-only drivers, to name a few.
Modula Mofolo (CEO)
Barbara Grantham (Director)
Modula is an experienced private equity practitioner with 12
years’ investment experience in SMEs and mid-cap companies
across various sectors in South Africa.
Barbara spent seven years at the IDC and four years growth
coaching for SMEs, before combining her love for investing
and SME value-addition in establishing the Fund.
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Fund OverviewThe University Technology Fund (“UTF”) is a University IP commercialisation fund, that
works to invest in and commercialise valuable South African IP originating from univer-
sities. The UTF is the first of its kind in South Africa and is based on best practice from
Oxford and Cambridge universities , tailored to the South African context.
The UTF was approved by the SA SME Fund IC in September 2019 with its First
Close expected in late 2019.
The University Technology Fund: R150m
Investment OverviewAs the fund is not yet established; no investments have been made to
date. Below are 2 examples of the fund’s pipeline.
Pipeline Opportunity 1: A University spin-off that produces antibodies
for use in vaccines.
Pipeline Opportunity 2: A University biotech spin-off working to un-
derstand and isolate communicable diseases.
Daniel Strauss (Partner)
Wayne Stocks (Partner)
Daniel is a Private Equity and Venture Capital entrepreneur, with
a B.Eng. and MBA from Stellenbosch University, with many years
experience working with entrepreneurs and investors.
Wayne is a CA and co-founder of Stocks and Strauss, and has held
executive roles in SA, USA, UK and Dubai. He has launched and built
effective teams to scale technology in 9 African markets.
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143 companies
49 companies
33 companies
13 companies
7 companies
N O M I N AT E D
F I R S T RO U N D
S E C O N D RO U N D
(Mr Price Group)
(Independent)
(Absa)
(Endeavor)
(FNB)
(Endeavor)
(Discovery)
(Anglo)
(Telkom)
(Distell)
(Endeavor)
(Vodacom)
(Discovery)
(Investec)
(Nedbank)
(Adcock)
(Sasol)
(Vodacom)
(Distell)
(Discovery)
(Mr Price Group)
(Nedbank)
(Discovery)
(Mr Price Group)
(Nedbank) (Nedbank) (Endeavor) (Endeavor)
I N I TA L S E L E C T I O N PA N E L
F I N A L I S T S
The CEO Circle was launched on 28 March
2019, as part of the Fund’s vision to lever-
age the collective resources of our corpo-
rate shareholder base. We have a bold goal:
to scale 5 to 10 black-founded and led high
growth companies into businesses of signif-
icant scale - value of R500 million plus - in a
period of 3 to 5 years.
We ran a rigorous 3 month selection process
with Endeavor ScaleUp to select 7 companies
as recipients of the CEO Circle Entrepre-
neurs Award 2019.
These companies are receiving personalised
pathways of support to help them scale. Of
greatest importance is introductions to busi-
ness leaders, to provide these entrepreneurs
with guidance and to open doors.
The CEO Circle companies are impressive: most
have revenue of R100 million+ p.a., are high
growth and have been in business for 5+ years.
We will shortly be launching the CEO Circle
2020, and will build on the optimism generated
by the initial cohort.
CEO Circle Overview
(Distell)
(Discovery)
(Mr Price Group)
(Nedbank)
(Discovery)
(Mr Price Group)
(Kumba)
(RMI)
(Kumba)
(Sasol)
(Discovery)
(Sasol)
(Vodacom)
(Nedbank)
(Vodacom)
(Kumba)
(Nedbank)
(RMI)
(Adcock)
(Endeavor)
(Distell)
(MTN)
(Endeavor) (Adcock) (Adcock)
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www.bt-industrial.co.za
Manufactures High Density Polyethylene
(HDPE) pipes and provides an array of com-
plementary services to customers including
engineering, project management, quantity
surveying, and maintenance solutions.
Nominated by Endeavor
KGOMOTSO LEKOLA
www.tskinteriors.co.za
Deliver high quality, multi-million Rand turn-
key interior fitouts and related construction
solutions through strategic partnerships with
skilled core suppliers. National footprint, with
blue-chip client base.
Nominated by Nedbank
THUSO KOBOYATAU
THATO SETATI
www.InnoVent.co.za
Dual offering: asset rental (computer hard-
ware) to corporates, and re-rental of refur-
bished computers. Leading independent/brand
agnostic IT leasing company in SA. Offices in
London, Zambia, Zimbabwe, and Tanzania.
Nominated by Discovery
DJ KUMBULA
ZAKHE KHUZWAYO
CEO Circle Entrepreneurs 2019
www.sentio-capital.com
Boutique asset manager focused on integrat-
ing AI and machine learning with qualitative
bottom-up research to build client portfolios.
Over R16bn of assets under management
which have tripled in the last 3 years.
Nominated by RMI
RAYHAAN JOOSUB
MOHAMED MAYET
Procures, supplies and distributes Active
Pharmaceutical Ingredients and other raw
materials to pharmaceutical, nutraceutical
and cosmetics manufacturers.
Nominated by Adcock
SUNGIE MOODLEY
www.v-vsigns.co.za
www.signcraft.co.za
A one-stop shop that manufactures, installs,
delivers and maintains corporate signage.
Operates nationally, and has a presence in 14
African countries.
Nominated by Nedbank
GRANT VAN GREENEN
www.kelemining.co.za
Niche contract mining services with a view
to using data analytics to improve safety,
productivity and efficiency in the industry.
Founded by a husband and wife team, Kele
has 250 employees on 10 mining sites.
Nominated by Kumba
JOMO KHOMO
KEFILWE KHOMO
SIYEZA
FINE
CHEM
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Our future plan: a fund of Venture Capital fundsThe SA SME Fund will be fully committed with the completion of its last 2 pipeline transactions.
With a significant exposure to VC in the Fund’s current investment programme, the SA SME Fund has
become one of the largest institutional investors in VC in SA. This was a deliberate strategy aimed
at growing the South African VC market, which is essential to stimulating South African innovation
and economic growth. Investment in VC in SA lags substantially behind many of our peers, including
countries with much smaller economies.
We have partnered with two of the most experienced VC managers in SA, and have supported 4
new VC managers who have raised first time funds. The SA SME Fund has adopted this approach of
funding experienced, as well as first time fund managers, in order to both deepen and widen the VC
market in SA, in line with global best practice.
The capital that we will inject into growing the VC market is intended to be catalytic, to attract more
funding into VC in SA.
The dearth of capital for VC in SA has led the SA SME Fund to raise a new Fund dedicated to funding
Venture Capital. The proposed Fund of Venture Capital Funds (FoVCFs) will be structured as follows:
• A limited liability partnership offering investors tax transparency
• First close of R750 million
• The new Fund will not charge investors any fees or take any carry
• The current SA SME Fund will provide a first loss of R50 million to limit potential downside of
other investors and to attract more capital into the fund
• It is anticipated that the new Fund of Venture Capital Funds will provide capital to between 6-8
VC Fund Managers, both existing and new Fund Managers, who in turn will invest across the
funding spectrum including seed capital, Series A and Series B.
The SA SME Fund will be approaching potential investors into the new Fund of Venture Capital
Funds early in 2020.
Shareholders:
MTN
Murray & Roberts
Nandos
Nedbank
Netcare
Old Mutual
Pioneer Foods
PSG Wealth
PSG Group Limited
RMI
RCL Foods
Remgro Limited
Sanlam
Santam
Sappi
Sasol
Spar
Standard Bank
Sun International
Telkom
Vodacom
Woolworths
Zeder
Public Investment Commission
Unemployment Insurance Fund
Employees Compensation Commission
Corporate South Africa and the Public Investment Corporation have played a pivotal role in the set
up and continuing success of the SA SME Fund. We are grateful to our shareholders for their ongoing
support and are excited about what we can collectively achieve.
Adcock Ingram
ABSA
Anglo American Platinum
Arrowhead Properties
Bidcorp
Bidvest
Capitec Bank
City Lodge Hotel Group
Clientele
Consolidated Infrastructure Group
Coronation Fund Managers
Curro
Discovery
Distell
Firstrand
Grindrod
Growthpoint Properties
Hollard
Impala Platinum
Imperial
Investec
Investec Property Fund
JSE
Kumba Iron Ore
Liberty
Multichoice
Momentum Metropolitan Holdings
Mr Price Group
S A S M E F U N D
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